Quaid-i-Azam Mohammad Ali Jinnah, in his first speech as the
father of the nation had singled out "bribery and corruption" as one
of the biggest curses and a real poison suffered by the people of India 53 years
ago.

Obviously, the purpose of the Quaid in pointing out these
ills was to sound a bell of warning for the newly born nation to refrain from
indulging these curses to live respectfully among the comity of nations.

Unfortunately, the golden advice of Quaid-i-Azam was
criminally ignored which consequently left Pakistan far behind of the countries
who got freedom much after Pakistan.

Though the nation is celebrating the 53rd Independence Day,
but without a true sense of independence. The rampant corruption and bribery,
which was allowed to flourish by the people at the helm of affairs consequently,
weakened our political and economic sovereignty.

This is an undeniable fact that the rampant corruption, which
prevailed for a greater period of the checkered history of Pakistan, has
resultantly rendered the innocent people to the economic, social and political
slavery.

The corrupt managers led the economy to the stage where it is
indebted under the huge foreign loans approximately between $35-38 billion. In
fact, the foreign debts do not really matter for the economy like Pakistan had
we maintained the repayment capability of our economy. The termite of corruption
has destroyed our repayment capability to such an extent that we have to borrow
from the international lenders to meet the financial obligations of debt
servicing every year. This is really a serious situation, which demands for a
permanent solution of this problem. The situation demands that in order to gear
up all our resources we should address the issues on priority basis for economic
revival, which is the only key to restore the repayment capability.

Reforms

The present government while realizing the gravity of the
situation has come out with a reform agenda which includes civil services
reforms, agriculture reforms, power sector reforms, poverty eradication
programmes, taxation reforms, Police reforms, accountability process,
Privatization plan, banking and financial sector reforms.

The government has also realized to take steps for uplifting
the image of Pakistan on the international scene. In this regard, the Ministry
of information is organizing a 2-day seminar with an objective to obtain facts
and views from a cross section of specialists in various fields so as to
formulate a strategy to improve the image of Pakistan abroad. It is encouraging
to note that the harsh facts have been admitted that Pakistan is in need of
image building. However people from cross section of life feel that for
uplifting Pakistan's image abroad, our own home requires to be in order first as
the charity always begins at home. Prominent business leaders observed that it
is an open secret that who was responsible for damaging the image of the
country. A strong lobby of the corrupt bureaucracy has always created problems
for smooth industrial investment in this country. They have always tried to make
the system so complex that even local investors are unable to make investment
within their own country. Why the local and foreign investors preferred to
invest in industrial zones of Dubai, Sharjah, Singapore, Jordan or even in
Bangladesh. Why exports of Bangladesh export processing zone shot up to the tune
of $1 billion a year while Karachi Export Processing can hardly earn $70 million
a year. Only because of inconsistency and complexities of the policies and the
system respectively.

Even today, you cannot get your job done unless you bribe the
relevant officials. For making the economic reforms and policies a success and
for implementation of good economic decisions within the country, first thing
which is required is to put the genie of corruption into bottle first. All
policies would prove a mere rhetorics otherwise, they remarked.

National issues

The most critical issue, which needed to be immediately
addressed, is to put together the shattered social fabric of the society. The
fragmentation of the society in different regional, sectarian and ethnic groups
is a dangerous sign for integration of the society. A strong bond of unity is a
pre-requisite to achieve the common goals whether economic, social or political.
To infuse national spirit among the fragmented society is the real issue which
is the responsibility of all forces working in different segments of the society
to bring people back on one platform, if they really love Pakistan as a mother
land.

Economic revival

Despite all political and economic odds, Pakistan has managed
to develop a strong agriculture as well as manufacturing base. A respectable
size of 8.8 million spindles in the textile industry offers a strong base for
enhancing our export earnings through value addition. All efforts are needed to
direct the enhancing productivity and production of this sector through value
addition. According to an estimate the textile sector alone has the strength to
double its exports currently around $5 billion by capacity utilization of the
available stuff.

Despite having the capacity and capability, why our
manufacturing or agriculture sector failed to play the desired role? The answer
is simple. The good governance, which is an essential element for economic
growth, was grossly missing from the national scene. Different parties and
individuals that came into power in Pakistan had a single point agenda i.e.
stick to the seat of power, come what it may to the economy or even to the
social fabric of the society. We would have to take lessons from the past. Good
governance is the key to success in all respects of economic and social life of
the country. The people can only achieve the goal of economic revival alone and
not by the bureaucracy. Priority should be given to the local investors who
being the natives can genuinely feel pinch of the severity of the pain. Concrete
steps are required to offset the atmosphere of mistrust between government and
the private sector to restore the confidence of the local investors. The bitter
experience of inconsistency and ad-hocism in government policies has created an
atmosphere of mistrust in the private sector.

Apart from exploiting the strong manufacturing base available
within the textile industry, Information Technology is another area which offers
great opportunities to support our economy. Though it is late, but as saying
goes "It is never too late to mend" the economic managers in Pakistan
should create a National Information Technology Council comprising of senior
executives of internationally minded institutions. The council should be given
the mandate to develop a precise, well-founded and creative view of
tomorrow" opportunities in this field. Non-resident Pakistanis may also be
invited to advise and bring with them contacts and new relationships. The
council might also invite other companies and nations to look at the
infrastructure and view Pakistan's possibilities. Pakistan should provide a good
environment for companies to flourish by way of incentives. All these steps may
provide a strong base for developing a viable information technology in
Pakistan. It is estimated that currently Pakistan's exports in this field are
merely around $30-35 million. A target of $1 billion can be achieved in this
field within a couple of years provided our academic institutions were given a
clear direction for promoting IT education at an affordable price.

Agriculture

As a result of harvesting a bumper wheat crop of over 21
million tonnes this year, Pakistan has signed a contract for export of one
million tonnes of wheat worth $170 million. This can be describing as an
ice-breaking event. As nothing succeeds than success. The government has planned
to encourage the growers by increasing the support price of wheat to achieve a
target of 23 million tonnes of wheat next year. This is a right step in the
right direction. Having a strong agricultural base, Pakistan can do magic in
developing its economy. A strong will is however required achieving optimum
level of its agriculture potentials.

The pattern reveals that during 1999-2000 agriculture sector
achieved a growth of 5.5 per cent as against 1.9 per cent of previous year. The
production of rice increased to 5.1 million tonnes as compared to 4.6 million
tonnes last year. The cotton production reached to 11.2 million bales from 8.7
million bales last year showing an increase of 10.3 per cent and 27.9 per cent
respectively. The production of sugarcane is estimated 46 million tonnes which
is lower by about 16 per cent as compared to last year production. The decline
in production is attributed to the delayed payments by the sugar mills, which
discouraged farmers to grow sugarcane. Other factors contributing for decline in
production include abolition of flat rates of electricity tube-wells by WAPDA in
Punjab created water constraints and less rainfall.

Investment

According to official sources, the industrial investment or
capital formation in the manufacturing sector witnessed an increase of 20.4 per
cent during 1999-2000. The private sector investment in large-scale
manufacturing registered a sharp increase of 30.6 per cent during the course of
the year while public sector investment recorded a marginal increase of 0.6 per
cent growth.

The net foreign private investment inflows stood at $449.6
million during July-April 1999-2000 as against $415.0 million in the comparable
period of last year showing an over all increase of 8.3 per cent. The portfolio
investment was severally affected by the external and internal shocks last year
but recovered from $7.4 million during July-April 1998-99 to $ 57.1 million
during 1999-2000. The foreign direct investment inflows however declined
marginally to $392.5 million during 1999-2000 as against $407.6 million in the
same period last year, which implies a decline of 3.7 per cent.

Current economic situation

For the last several years, Pakistan's economy has been
facing serious difficulties owing to persistent lapses in implementation of
structural reforms and stabilization measures. The imposition of economic
sanctions following nuclear tests of May 1998 exposed Pakistan's underlying
vulnerability and precipitated a balance of payments crisis.

Following October 1999 an attempt was made initially to
stabilize the situation. There are signs, which suggest that the economy has
begun to stage a modest turnaround. The recovery in economic growth is fully
supported by a strong rebound in agriculture and a pick up in large-scale
manufacturing excluding sugar. Also contributing to the current year performance
is a fall in rate of inflation, a "V-shaped" recovery in exports, a
much greater degree of exchange rate stability, stable foreign exchange
reserves, substantial progress made in restructuring Pakistan's foreign debt and
improvement in credit rating in international bond market.

Major challenges however include improving fiscal account,
restoring investors' confidence further and achieving higher growth on a
sustainable basis.

As against an average growth rate of 6 per cent in the 1980s,
real GDP growth slowed to an average of 5 per cent and further to 4 per cent
during the first and second half of the 1990s, respectively. While agriculture
maintained an average growth rate slightly above 4 per cent during the last two
decades. It is the large-scale manufacturing and services, which contributed to
deceleration of growth in the 1990s. As against an average growth of 8.2 per
annum in the 1980s, large-scale manufacturing slowed to an average of 4.7 per
cent and further to 2.3 per cent in the first and second half of the 1990s
respectively. Services sectors grew at an average rate of 6.6 per cent in the
1980s but slowed to an average of 5.1 per cent and 4.1 per cent during the first
and second half of the 1990s respectively. Fixed investment as per cent of GDP
declined significantly in the 1990s. As against an average rate of close to 17
per cent in the 1980s fixed investment declined to 15.3 per cent in the second
half of the 1990s.

Unemployment

Currently, the unemployment rate is estimated at 10 per cent
and the phenomenon of underemployment even more serious in Pakistan.

Only about 60 per cent of the annual increment to the labour
forces, estimated around 12-1.3 million, are expected to be gainfully absorbed,
adding the remaining 500,000 or so persons to be pool of unemployed annually.

The estimates of unemployment, developed by various
government departments and independent economists differ quite substantially.

Officially, out of a population of 136.9 million an estimated
39.28 million persons are in the labour force with male and female components
being at 33.37 million and 5.91 million respectively. About 44 per cent of the
employed labour force are in the agricultural sector and about 56 per cent in
the non-agricultural sector - about 20 per cent in the formal sector and 36 per
cent in the non-formal sector.

Official figures however described the overall open
employment rate as 6.1 per cent for both sexes and the underemployment, not
meticulously estimated, is reported to be a multiple of the open unemployment.

Official statistics suggest the under-employment rate at 11
per cent while studies in private sector estimate that it could be between 15
per cent and 40 per cent.

A large scale under utilization of women resources in terms
of duration for work, income, skills and productivity differentials has
contributed heavily to the country's poverty.

In order to mitigate the unemployment situation, the present
government has launched a poverty alleviation programme. The introduction of
Micro-Finance Bank for which a fund of Rs32 billion has been allocated by the
government a $100 million in assistance from the Asian Development Bank is of
course a welcome step. The scheme of Micro-Finance Bank is intended to extend
credit of Rs5000 to Rs30,000 to people in smaller communities to be used for
income generating activities. The government feels that it is in essence a
revolutionary social movement to empower the under-privileged communities. The
scheme aimed at to help the poor enabling them to generate income by using the
amount. So far, the banks in Pakistan were meant only for deposit purposes. The
poor had to access to the banks. The huge advances were allowed only to the
moneyed people or on political considerations. The scheme if allowed to be
implemented in accordance with its true spirit, no one could stop an economic
revolution, which may emerge out of the ranks and files of the poor in this
country.

Different governments in the past had also launched such
programmes, unfortunately the beneficiaries of such schemes were chosen on
political considerations. The Yellow Cab Scheme and distribution of land among
the land-less haris are the glaring example of this political stunt. The
needy masses were never allowed to benefit out of these schemes.

It is hoped that the present government would take stock of
the previous examples and evolve a system to ensure that the benefit of the
scheme goes to the poor purely on merit and not on the basis of recommendations
or considerations i.e. "Parchi" or "Sifarish".